Crowd Machine (CMCT) Token Theft: An Arrest Made, Warning Against Buying the Token

The Crowd Machine wallet exploit saw the entire reserve of the ICO liquidated on exchanges, tanking the price by 99%.

Crowd Machine (CMCT) announced an arrest had been made in relation to the recent theft of funds from the startup project’s reserve wallet. Most exchanges have suspended the CMCT token, and the team is looking for ways to recover the lost balances.

The Crowd Machine team warned against purchasing any CMCT tokens through any means, as there is a risk of being sold some of the stolen funds:

“It is highly recommended that no one purchase CMCT until the criminal investigations have ceased, at which time, we expect closed exchanges to re-open. Purchases of stolen tokens by those not involved with the theft will be honored,” the team wrote in a recent blog.

Curiously, the only marketplace where CMCT is traded is HitBTC, while activity has been frozen on Bittrex and all other exchanges. This has lead to a price anomaly, where CMCT has risen speculatively, by as much as 23% in 24 hours. Still, the price of CMCT remains depressed, near the lows at $0.0027.

In addition to the suspension of trading, the token was delisted from IDEX, and traders see a potential for delistment from Bittrex.

While crypto wallets are generally a safe technology, involving the human factor may lead to losses. The nature of the hack is still unknown, and not revealed by the team, in order to allow law enforcement to investigate.

The hacker’s wallet was active for three days, in the end sending and receiving Ethereum (ETH), possibly as proceeds from the CMCT token sale. The address, presented as the hacker’s stash, only contains 967.33 CMCT, worth around $2.67, which entered the wallet around three days ago.

In the case of CMCT, just three addresses hold more than 67% of all tokens. According to Reddit users, the flash crash allowed one user to buy up 10% of the CMCT supply for 0.5 ETH.

Days after the theft, users are most disturbed by the trading freeze, which in effect brought the value of CMCT to zero, with no trading activity.